The exchange traded fund (ETF) industry is going to go in for the kill, as the actively managed mutual funds just aren’t earning their keep. This is the ETF industry’s best opportunity to gain more market share and prove its mettle amid the mess.
Cost Efficiency. ETFs are more cost-effective than your average mutual fund, and unlike the active managers who claim protection, ETFs are able to insulate investors better than most managers.
Easy to Trade. ETFs are also flexible to trade and have better tax advantages than their predecessors. 2008 was a poor year for most indexes, especially The Dow Jones Industrial Average, which is at levels not seen since 1931, reports Jane Bryant Quinn for Bloomberg.
Tracking an Index. An ETF is like a mutual fund that you can sell and trade like a single stock through a brokerage account. Most ETFs are index funds – meaning they track the performance of a particular market, or slice of the market, rather than try to exceed it.